Clients Continue to 'Stay the Course' With Portfolios, Advisors: Fidelity

Fidelity Investments‘ latest research shows that tensions currently exist between client objectives and risk. At the same time, though, clients’ asset allocation — including sectors and styles — did not change  significantly from the first quarter to the second, when the coronavirus pandemic erupted in the U.S.

“In these uncertain times, advisors have really helped their clients ‘stay the course’ and remained focused on their long-term goals through the ups and downs of the market,” Matt Goulet, senior vice president for portfolio solutions at Fidelity Investments, said in a statement.

The giant asset manager recently analyzed a study conducted by Callan Associates that calculated the expected return for different levels of risk from 1995 through more recent years. (In 1995, for instance, an investor could expect a return of 7.5% by investing entirely in bonds.)

To achieve that same level of return in recent years, an investor would have had to nearly triple the portfolio’s risk by investing in a mix of bonds, U.S. large- and small-cap stocks, international stocks, real estate and alternatives.

What’s in Portfolios Today?

In the first half of this year, Fidelity reviewed 3,972 unique portfolios created for clients by third-party financial advisors that were submitted through Fidelity Portfolio Quick Check or in consultation with the firm’s portfolio construction guidance team.